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Plans for reform of the House of Lords will cost more than £1 billion by the end of the term of office of the first peers to be elected, according to new figures.

Labour peer Lord Lipsey, former Economics Editor of the Sunday Times – who has made calculations of the cost of the proposed shake-up – said Leader of the Commons Jack Straw refused to put a cost on the plans unveiled in a White Paper last month. This was on the grounds that it could not be worked out until Parliament decided the exact shape of the change.

However, Lord Lipsey said he has used official figures and plausible assumptions to estimate the cost at £1.092 billion.

Lord Lipsey said: “People tell pollsters they want an elected Lords. But would they still want that if they knew what it was going to cost them?

“My estimate is a conservative one. Given inflation and given the capacity of elected politicians to insist on more resources, the outcome could easily be much more expensive.

“At the moment, the Lords provides value-for-money as a legislature. It taps the expertise of its members, who are unpaid. That is why the cost per member of the Lords amounts to only £149,000 by comparison with £726,000 for each member of the Commons. Which would people rather their taxes went on – nurses and hospitals, teachers and schools or yet another gang of expensive politicians?”

The figures are published as MPs began a two day debate on the Lords, and will later take part in a free vote on a series of eight options for reform, ranging from scrapping the upper chamber entirely to having anything between none and 100% of its members elected.

The last occasion MPs voted on Lords reform in 2003 ended in farce, when every option was rejected.

Mr Straw’s White Paper is the third on Lords reform since Labour came to power in 1997. It calls for a slimmed down “hybrid” Upper House of 540 members with a mixture of appointed and elected members, who would no longer be known as peers.

A Government source said: “These figures are preposterous and back-of-an-envelope calculations.”